They had US$11.9m in the bank left at 31 December 18 with at least $10.8m left to spend on construction in the March quarter based on the December quarterly. 11.9-10.8 = $1.1 left over.
The last tranche of the Macquarie debt wasn't drawn down yet and there was no certainty they were able to do so without Macquarie forcing another capital raise on them given they would fail the minimum cash covenant of US$8m. Macquarie has a history of this. They had no hope of meeting that minimum cash threshold within the next 6-9 months given time to positive cash flow. That's why the stock was at 13c.
Anyone buying PNL in the last couple of months was betting that given the promising metrics of the project and line of sight to first coal management could pull off a debt refinance to kick the debt issues down the line. The risk was that they'd fail to re-fi the debt and shareholders would cop another capital raise at 9-10c. The potential upside was that management could re-fi with minimal dilution and with no remaining overhangs the stock would over time re-rate to true value of +30c/sh.
All my opinion, do your own research.
PNL Price at posting:
15.5¢ Sentiment: Buy Disclosure: Held
